US single-family housing starts fall in January; permits rise

By Thomson Reuters Feb 16, 2024 | 8:12 AM

WASHINGTON (Reuters) – U.S. single-family homebuilding fell in January, likely because of harsh weather conditions, but a rise in permits for future construction suggested a rebound in the coming months.

Single-family housing starts, which account for the bulk of homebuilding, dropped 4.7% to a seasonally adjusted annual rate of 1.004 million units last month, the Commerce Department’s Census Bureau said on Friday. Data for December was revised up to show single-family starts falling to a rate of 1.054 million units instead of the previously reported 1.027 million units.

Extremely cold weather across much of the country during the month likely made it difficult to break ground on new projects. The below-normal temperatures helped to depress retail sales and manufacturing production in January.

Homebuilding remains supported by an acute shortage of previously owned houses on the market.

Single-family homebuilding fell in the Midwest, the densely populated South and the West. It rose in the Northeast.

A rebound is likely as temperatures rose in February, and with the Federal Reserve expected to start cutting interest rates sometime in the first half of the year. A survey from the National Association of Home Builders on Thursday showed confidence among single-family builders rose to an 18-month high in February.

The survey found that fewer builders reported cutting home prices and the use of sales incentives to attract buyers was also diminishing.

Permits for future construction of single-family homes increased 1.6% to a pace of 1.015 million units last month.

Starts for housing projects with five units or more plunged 35.8% to a rate of 314,000 units in January.

Overall housing starts tumbled 14.8% to a rate of 1.331 million units in January. Economists polled by Reuters had forecast starts would be unchanged at a rate 1.460 million units. Multi-family building permits dropped 9.0% to a rate of 405,000 units last month. Building permits as a whole slipped 1.5% to a rate of 1.470 million units last month.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)